Finance veterans capitalize on national niche to form iCap

SAN DIEGO — The newly formed iCap Realty Advisors, created by the merger of 11 investment bankers, is billing itself as a company that offers “a national scope with in-depth market knowledge.” The numbers seem to support the claim of this Chicago-based company. For the two years prior to iCap's formation, the 11 firms that now comprise the national real estate finance and investment company closed more than 700 loans totaling $6.6 billion with an average loan size of $9.3 million. Additionally, these same 11 companies have closed transactions with more than 80 capital sources, ranging from Deutsche Banc Alex.Brown to Bear Stearns Co. to Key Bank.

“We're not really a start-up,” said iCap principal James S. Lee, who joined several other company executives for an interview with NREI at the Mortgage Bankers Association of America (MBA) conference held in San Diego in early February. “We have people competing to do business with iCap. We're a different breed; we're a breed apart.”

One common bond is that most of these companies had developed relationships with one another through Prudential Mortgage Capital Co.'s PruExpress small loan program, said Ross A. Berman, president and COO of iCap, emphasizing that the formation of iCap will be difficult to copy. “I don't think you'll find another group that has such similar goals, philosophies and no territorial issues. Imitation is the best form of flattery, but it would be difficult to duplicate.”

David Durning, managing director in charge of mortgage origination in the Chicago office of Newark, N.J.-based Prudential Mortgage Capital, says iCap is positioned to do well based on the relationships it formed with borrowers and capital providers through its 11 mortgage companies.

“The trick is that it's a competitive market, and the other national firms also have some very strong people and some strong originators,” Durning said. “The extent to which you can have people who serve the ultimate client here, which is the borrower, is what's critical.”

The model for the structure of iCap is Dallas-based Integra Realty Resources, the country's largest appraisal and consulting firm with 40 offices in 20 states. The principals of iCap liked the idea of a real estate finance company with a national and local presence.

With 20 offices nationwide and a principal located in each office to provide clients with local market insight and consistency, iCap is responding to the market's increasing demand for national representation from a single advisory company, Berman said. “Increasingly, clients need national representation,” according to a Q&A sheet distributed by iCap. “They can choose to work with multiple companies around the country, but it's far more efficient and cost-effective for them to deal with a single advisor.”

One of the big selling points of iCap is that customers can benefit from the company's significant combined loan volume and strong lender relationships, which translates into better deals and greater efficiency for lenders and borrowers alike, according to Berman.

iCap also plans to offer clients up-to-the-minute information on market conditions and national lending programs through a proprietary database. According to iCap officials, this tool will provide seamless integration in serving iCap clients around the country, and bring them the power of national decision-making information.